Maharashtra Plans Special Team to Investigate Crypto Fraud

The Maharashtra government has announced the plans for a Special Investigative Team (SIT) to investigate all cryptocurrency-related fraud cases in the state. The statement was made by Minister of state for home Deepak Kesarkar while responding to a Calling Attention motion, which was tabled by the leader of Opposition, Dhananjay Munde, in the Legislative Council.

“The SIT will take over investigations currently being done by various units of the state police. It has been asked to complete the process of attaching the properties of companies that have cheated investors in the name of cryptocurrency within three months,” The Pune Mirror quoted Kesarkar.

The SIT is to be led by an official of the rank of additional director-general of police. The Maharashtra government has also planned to initiate an inquiry with a panel led by) Prabhat Kumar, additional director general of Economic Offence (EO). “The panel will be entitled to coordinate with central agencies including Enforcement Directorate (ED) for probe in such scams,” Kesarkar said.

Minister of state for home Deepak Kesarkar told DNA, “Already such cases were reported in Thane, Pune, Nanded and Kolhapur where members of public have been allegedly cheated through cryptocurrency. The local police have registered cases. However, the panel will be empowered to inquire into such scams expeditiously. Prabhat Kumar will be authorised to include experts from finance, banking sectors and also representatives of district collectors.”

Recently, various Bitcoin fraud cases have been registered in cities, including Thane, Pune, Kolhapur and Nanded. Frauds amounting to a total of about INR 2,000 crore have been registered in cases mostly in fake multi-level marketing (MLM) schemes.

In June, the Thane Crime Branch unearthed a cryptocurrency scam, which had been operating a multi-hundred crore rip-off disguised as a real estate firm called The Flintstone Group for the past two years.

In April, seven people were arrested in an MLM scheme. The accused invited investment in Bitcoin but returned in cheap cryptocurrencies like Mcap and Ether. So far, at least 8,000 people have fallen prey to crypto scams in Maharashtra, and cybercrime sleuths are investigating 27 cases of fraud.

In April, the police arrested the founders of Delhi-based Darwin Labs, Sahil Baghla and Nikunj Jain as co-conspirators of the cryptocurrency scamster Amit Bhardwaj, for a $300 million cryptocurrency Ponzi scheme. Recently, seven police officers, arrested in connection with a bitcoin extortion case, were refused bail by a city sessions court. The officers in question allegedly abducted a Surat-based builder and forced him to transfer 200 bitcoins.

The Maharashtra government’s decision has come in the wake of the Reserve Bank of India (RBI)’s announced ban on crypto banking transactions. As the government still shies away from virtual currency transactions, troubled crypto-trading platforms complain that the government’s fears and concerns rise more from its ignorance regarding the new trend. Recently, platforms, WazirX and Koinex, have found a legal solution to skirt the banks while transacting in crypto, namely P2P crypto trading. This ‘jugaad’ will aid cryptocurrency enthusiasts transact without involving the services of banks.